Madison - St. Clair Record

Wednesday, August 21, 2019

Texas-sized judgment against Trinity Industries could improve chances for St. Clair case

By The Madison County Record | Jun 23, 2015


MARSHALL, Texas – U.S. District Judge Rodney Gilstrap ordered guardrail maker Trinity Industries to pay $464 million to a federal government that didn’t ask for it, improving the chances that St. Clair County can secure a hefty sum on behalf of all Illinois counties.

St. Clair County’s suit against Trinity remains frozen at the moment, for District Judge David Herndon of East St. Louis stayed it pending resolution of the Texas case.

Gilstrap’s order didn’t resolve the case, for Trinity plans to appeal to the Fifth Circuit in New Orleans.

In addition to the damages Gilstrap awarded to the government, he awarded $218 million to Joshua Harman, who filed the suit on behalf of the United States.

The Federal Highway Administration could have joined Harman’s suit but chose not to do so.

Trinity posted an appeal bond of $686 million at a hearing on June 23, after Gilstrap chewed out its lawyers for stating in bond documents that he approved the amount.

He hadn’t approved it, and Harman had asked him to add 20 percent.

Karen Dyer of Orlando, Fla., representing Harman, said, “I don’t know how many millions it will cost to pursue this all the way through.”

Gilstrap said Trinity counsel intentionally filed incorrect facts.

“It’s wrong and you knew it was wrong when you filed it,” he told Anne Johnson of Dallas.

She had entered an appearance for Trinity the previous week.

“You basically forced the court to act on an emergency basis," Gilstrap said.

He said Trinity has net worth of $3 billion, and he would not add 20 percent.

“I’m not prepared to punish your client for your conduct,” he said.

Jurors returned the verdict last October, at $175 million.

They found Trinity violated the False Claims Act by changing the design of its ET-Plus guardrail without disclosing the changes to the government.

Gilstrap did not immediately enter judgment, ordering mediation instead.

His hesitation did not deter plaintiff lawyers in other states, who filed suits with similar allegations.

David Cates of Swansea, son of Fifth District appellate judge Judy Cates, filed one in federal court for Hamilton and Macon counties, last November.

Hamilton County soon dropped out, and St. Clair County replaced it as lead plaintiff.

The complaint calls for replacement of all guardrails on Illinois county roads, plus damages for breach of warranty and unjust enrichment.

Although the complaint alleges that the improper design caused injuries and death, it seeks no compensation for those.

Damages in the Texas trial related solely to federal reimbursement, not to safety.

The Federal Highway Administration doesn’t consider Trinity guardrails unsafe, and continues to reimburse states and local governments for them.

The agency issued statements in Trinity’s favor before trial and after it, while Gilstrap awaited the results of mediation.

On June 9, after mediation failed, Gilstrap entered judgment tripling the verdict to $525 million and adding $138 million in penalties for a total $663 million.

He awarded the United States 70 percent, and awarded Harman 30 percent, plus $19 million in attorney fees and costs.

He wrote that Trinity tried to blame Texas A&M engineers for concealing design changes.

“Harman produced ample evidence that Trinity, not Texas A&M, made the decision to modify the ET-Plus without announcement,” Gilstrap wrote.

He wrote that Trinity falsely certified that the highway agency accepted the ET-Plus.

“Harman introduced substantial evidence that Trinity made this decision out of a desire to reduce its costs and increase its sales,” he wrote.

He wrote that results of tests at the highway administration since the verdict “are wholly outside the record of the trial in this case and cannot be considered by this court.”

He wrote that the agency could not have accepted changes of which it was not aware.

Harman and Trinity can expect close scrutiny at the Fifth Circuit, not only because of the amount at stake but also because the Fifth Circuit has seen this case before.

Prior to trial last year, the Fifth Circuit denied a petition from Trinity to stop the trial.

Fifth Circuit judges called it a close case, however, pointing out that the highway administration found the product sufficiently compliant with safety standards.

They wrote that, “a strong argument can be made that the defendant’s actions were neither material nor were any false claims based on false certifications presented to the government.”

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